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Private provision of public goods between families

  • Richard Cornes
  • Jun-ichi Itaya


  • Aiko Tanaka

We consider a two-stage voluntary provision model where individuals in a family contribute to a pure public good and/or a household public good, and, at the same time, the parent makes private transfers to her child within the same family. We show not only that Warr’s neutrality holds regardless of the different timings of parent-to-child transfers, but also that there is a continuum of Nash equilibria in the sense that individuals’ contributions and parental transfers are indeterminate, although the allocation of each’s private consumption and total public good provision is uniquely determined. We further show that, even in the presence of impure altruism or productivity difference in supplying public goods, neutrality and uniqueness of the equilibrium allocation may persist.

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Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 25 (2012)
Issue (Month): 4 (October)
Pages: 1451-1480

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Handle: RePEc:spr:jopoec:v:25:y:2012:i:4:p:1451-1480
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  1. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
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  8. Torsvik, G., 1990. "When Groups Contribute to a Public Good: The Importance of Institutional Framework for Making Collective Decisions," Papers 15-90, Norwegian School of Economics and Business Administration-.
  9. Konrad, K.A. & Lommerud, K.E., 2000. "The Bargaining Family Revisited," Norway; Department of Economics, University of Bergen 212, Department of Economics, University of Bergen.
  10. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985. "The Strategic Bequest Motive," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1045-76, December.
  11. Richard C. Cornes & Emilson C.D. Silva, 1997. "Rotten Kids, Purity and Perfection," Keele Department of Economics Discussion Papers (1995-2001) 97/13, Department of Economics, Keele University.
  12. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
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  15. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  16. Yang-Ming Chang, 2009. "Strategic altruistic transfers and rent seeking within the family," Journal of Population Economics, Springer, vol. 22(4), pages 1081-1098, October.
  17. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
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  23. Richard Cornes & Jun-Ichi Itaya, 2010. "On the Private Provision of Two or More Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(2), pages 363-385, 04.
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  25. Laitner, John, 1991. "Modeling Marital Connections among Family Lines," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1123-41, December.
  26. Cornes, Richard & Sandler, Todd, 1985. "The Simple Analytics of Pure Public Good Provision," Economica, London School of Economics and Political Science, vol. 52(205), pages 103-16, February.
  27. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
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